building capacities of workforce in …garph.co.uk/ijarmss/apr2018/7.pdf · manufacturing are...

International Journal of Advanced Research in ISSN: 2278-6236

Management and Social Sciences Impact Factor: 6.943

Vol. 7 | No. 4 | April 2018 www.garph.co.uk IJARMSS | 66

BUILDING CAPACITIES OF WORKFORCE IN OUTSOURCING INDUSTRY

THROUGH OPEN AND DISTANCE E-LEARNING

Garima Sharma, Ph.D. Research Scholar, SOITS (School of Inter-disciplinary and Trans-

disciplinary Studies), IGNOU, New Delhi

Abstract: Human Capacity Building is the development and strengthening of skills and

capabilities to survive as competent work professionals in an organization. To remain

competitive in their own sector organizations always need highly competent staff. Many

organizations realizing the importance of capacity building of human resource launch their

own customized web-based trainings and e- learning programmes. Organizations with such

e-learning programmes have courses customized to suit the specific needs of the

organization which may not give much value addition to the employee in the outside world.

In the current context, ODeL provides a million-dollar opportunity to working professionals to

upgrade their skills and build their capacities. Open and Distance Learning has become a

vital means for self growth in the professional world. This paper uses secondary research to

understand the contribution of ODeL in outsourcing industry which has been a source of

employment for various young professionals in the current scenario. These outsourcing

industries provide numerous services to their on-shore and off-shore clients. At a global level,

India maintains a leadership position in the outsourcing industry with a share of 55% in the

global outsourcing market. As per the NASSCOM study, more than 500 companies in India

are offering Business Processing Outsourcing services with a business of more than $100

billion.

Keywords: Capacity Building, ODeL, Outsourcing Industry

INTRODUCTION

Outsourcing as a cost saving mechanism started way back in the 1700s. During Industrial

Revolution many manufacturing industries shifted their production of goods to countries

with cheaper labour. The term ‘outsourcing’ refers to the practice of exporting work or

certain tasks by companies in developed countries to companies in less developed countries

(Bhowmik, 2004). Unlike the reasons of earlier times which were saving on overhead and

labour cost, today the drivers of outsourcing industry are improved efficiency, greater




productivity, focus on core functions and to best utilize its own core competencies. The

outsourcing industry today is no more limited to manufacturing goods but has expanded to

include numerous types of services ranging from medical transcription, customer care,

medical billing services, database marketing to Web sales/ marketing, accounting, tax

processing, transaction document management, telesales/ telemarketing, biotech research,

photo research, digital marketing, books editing, content writing, banking services, legal

work, insurance services and what not. (outsource2india, undated)

The period of early '90s saw the emergence of service outsourcing. With the onset of

globalization in early 1990s, the service outsourcing industry showed rapid growth.

Economic reforms linked to liberalization and privatization gave further boost to

outsourcing industries appealing many foreign countries to invest in Indian market. This has

been a major contributor to the growth of Indian economy. Outsourcing in service area was

first initiated by some global airlines that outsourced their back-office work to India,

followed by IT companies. Some of the earliest players in Indian outsourcing market were

Texas Instruments, American Express, Swissair, British Airways and GE, who started their

captive units in India (Outsource2india.com).

Source: NASSCOM (Undated) Source: NASSCOM (Undated)

Figure 1 Position of India in Global Sourcing Market

Figure 1 shows that India maintains a leadership position in global outsourcing with a share

of 55%in the year 2014 with global outsourcing increasing 1.2 times in last five years. Indian

outsourcing industry grew at 9-10% in 2014 with more than 27% of new delivery centres set

up in India. As per the NASSCOM study, in the financial year 2016 the industry gave total




revenue of 143 billion dollar. NASSCOM (India's National Association of Software and

Service Companies) acts as a coordinating body for the outsourcing industry. It also

conducts surveys and conferences which help in disseminating knowledge and research to

outsourcing industry.

Over the years, India has built up its capabilities and proved to be one of the best nations for

outsourcing services by the developed countries. As identified by NASSCOM, the major

reasons behind India’s success include-world class IT software and technology-related

services, abundant, skilled and English speaking manpower, high-end telecom facilities and

infrastructure at par with global standards, better focus on maintaining quality and

performance standards, fast turnaround times, and the ability to offer 24x7 services based

on the country's unique geographic locations that allow for leveraging time zone

differences, friendly tax structure and positive policy environment encouraging foreign

companies for investment. Banking, finance, accounting services, telecom, and

manufacturing are amongst the top four verticals in service outsourcing in India.

ISSUES AND CHALLENGES

At a global level though India has maintained a leadership position in global outsourcing

market but companies operating in the sector face their own challenges. One of the

foremost challenges is cut-throat competition not only among the national competitors but

among the global competitors. Management Study Guide (MSG) Experts identified several

issues faced by service outsourcing industry in India. There are issues at the implementation

level due to various reasons such as poor infrastructures, logistic, power outages, poor

traffic management, political instability and shutdowns. All these take a toll on the

operations of these firms and pose a threat of instability in global competition. Service

outsourcing industry being run 24x7 requires an undisruptive supply of all its services to

perform at their optimum level.

A bigger challenge which the service outsourcing industry faces today is of the unavailability

of highly skilled resources. Despite the presence of manpower in large number, the industry

fails to find skilled resources. The industry requires people with specific skill sets rather

than simply graduates graduating in million every year. Availability of manpower with

technical skill sets creates a secure space for India in global market. The sector which

http://www.nasscom.in/




evolved by doing low end work has remained at that level by and large over a period of

time, due to which it is rapidly being threatened by new entrants like Philippines, Poland

and other countries. To maintain its position in global outsourcing market, Indian

outsourcing sector either has to cut down at its operational cost or create the pool of skilled

manpower. However cutting down at operational cost is not a long term solution as at the

end of the day the sector can only survive when it is profitable and helps the economy to

grow. According to MSGExperts the nature of outsourcing companies operating in India fall

in the category of BPOs (Business Processing outsourcing) while there are other types of

outsourcing such as KPO (Knowledge Processing outsourcing), RPO (Research Processing

Outsourcing), LPO (Legal Processing outsourcing), APO (Analytics Processing Outsourcing),

HRO (Human Resource Outsourcing) and MBPO (Medical Business Processing Outsourcing)

which as of now, are very few in number. The reason for their minuscule presence is again

attributed to non-availability of skilled manpower.

At macro level, the outsourcing industry also gets impacted by the political, economic and

law related changes occurring in the nation of outsourcers which are U.S. and Europe

predominantly. For instance, recently in the presidential campaign in the United States,

there had been a hue and cry over outsourcing to India. Such changes in macro environment

keep throwing challenges pertaining to stability and security of the sector. However, the

Indian outsourcing sector must strengthen its infrastructure and workforce capacities to

overcome such challenges rather than becoming scapegoat when unfavourable changes

occur in macro-environment.

PURPOSE

Outsourcing Industry requires the skill sets beyond conventional education. This means that

simple graduation may not create competent staff. This paper highlights the need to

develop distinct skill framework for different outsourcing services. As Chen and Chi (2010)

have proposed a skill framework for IT employees in outsourced environment, the proposed

skill framework is divided into four layers based on their roles and responsibilities (as shown

in Figure 2).




The Skill Stacks (layers) Content of Each Stacks

Strategic Planning Knowledge

Understanding of the trend of business market IT-facilitated innovations Ability to plan or own a new product or IT-facilitated project

Business Process Knowledge

Whole range of enterprise business process Laws, regulations as well as rules needed in business process Ability to solve or improve the weakness of business process

Professional Skill Software Engineering Networking Information security Trend in IT product/cost Procurement process and legal issues Project Management Auditing and testing

Basic Working Skills Communication skill Positive working attitude Presentation skill Solution of problems

Figure 2 The Skill Framework of IT employees working in outsourced environment

Source: Chen and Chi (2010)

Chen and Chi in their skill framework emphasised an important aspect that the skills must

be built up stack by stack, up from the stack of basic working skills toward the stack of

strategic planning knowledge. The term ‘stack’ emphasizes the importance of building up

the skills for the next level. When people move up in the organisations through IJPs (Internal

Job Promotions) or are directly hired at senior positions, then that employee’s performance

and decisions are better when they have good knowledge of work at their level and know-

how of nature of all levels under them. For instance, in Figure 2, the employee in stack 3

(Business Process Knowledge) can only be competent in developing an improvement plan

when s/he has the understanding of professional skill of that process.

Similarly, skill frameworks must be developed for other services in Indian outsourcing

industry. Skill framework helps in identifying the skill set required by employees of that

particular service outsourcing firm. Based on previous studies (Chen and Chi 2010; Liu R. et

al. 2011; and NASSCOM undated), two more skill frameworks- one for contract

management process in LPO (Figure 3) and another for photo research process in KPO

(Figure 4) are proposed by the author.






Understanding of the trend of business market Strategic planning for business expansion Budget setting, setting goals for the financial year Innovation, new business model


Whole range of enterprise business process Laws, regulations as well as rules needed in business process Ability to solve or improve the weakness of business process Process revenue generation

Managerial Skill Handling team conflict management Tracking system Quality Management Production Management Domain Knowledge

Technical Skills Graduates Degree in Intellectual Property Right

Figure 3 The Skill Framework of employees working in LPO



Understanding of the trend of business market Strategic planning for business expansion Budget setting, setting goals for the financial year Innovation, new business model


Whole range of enterprise business process Laws, regulations as well as rules needed in business process Ability to solve or improve the weakness of business process Process revenue generation

Managerial Skill Handling team conflict management Tracking system Quality Management Production Management Domain Knowledge

Technical Skills Degree of Law Negotiating Skills International Law

Figure 4 The Skill Framework of employees working in KPO

Communication

skill

Presentation skill

Positive attitude

Team work

Basic skills

Communication

skill

Presentation skill

Positive attitude

Team work

Basic Skills




The two frameworks proposed in Figure 3 and Figure 4 are for high end work in service

outsourcing i.e. LPO and KPO. In the proposed frameworks, the employees in bottom layer

are responsible for performing the core job requiring domain knowledge which is referred

to technical skills in the framework whilst the basic skills are referred to soft skills that

includes communication skill, presentation skill, positive attitude and team work. Basic skills

or soft skills are essential at every level thus is an integral part of each stack in the proposed

skill framework. One level up in the hierarchy needs professionals who are competent

enough to handle team/s with their managerial skills and include the responsibilities like

work distribution, maintaining tracking systems, conflict handling, workforce management,

production management, quality management and handling escalations. The next two

stacks- Business Process Knowledge and Strategic Planning Knowledge have the same work

profile as proposed in the skill framework of Chen and Chi.

Another aspect which comes into focus from these skill frameworks is that work profile in

the stacks of Managerial skill, Business Process Knowledge and Strategic Planning process

remain more or less similar and does not vary much with the change of process or

organisation. Whilst the technical skill can be numerous depending on the nature of services

outsourced. Creation of skill framework for each process of a company in service

outsourcing industry provides critical information on technical skills set and managerial skills

set required by the employees. Chen and Chi (2010) in their study also highlighted that as

we move up in the organisation structure from technical position to managerial position

then to senior manager position, the degree of knowledge of technical skills decreases with

each level up in the organisation. (Shown in Figure 5)

Figure 5 Skill Composition in Each Stack

Technical Skills

Strategic planning

knowledge

Business Process

Knowledge

Technical Skills

Technical Skills

Technical

Skills

Managerial

Skills

Skill Stacks




In the current scenario people in search of seeking better opportunities, opt for movements

from one organisation to other organisation. Also organisation on their way to expansion,

are in abundant need of hiring new staff at all levels. This indicates that employees at senior

position may not necessarily have reached to that position through IJPs. In such

circumstances, the employees will need capacity building of technical skills (domain

knowledge) to get good hold of the process and to deliver desired outcomes. On the other

side, when the employees take growth in the organisations through IJPs, the organisation

requires to build skill set pertaining to managerial, business development and strategic

planning knowledge. Thus, in both situations where either employee takes growth in the

organisations through IJP or new staff is hired at senior positions, there is a critical need for

capacity building of workforce in the service outsourcing Industry. The employees need to

enhance their skill sets to remain competent at different positions.

Based on the literature review, the skill set required in the capacity of senior positions and

technical skills required at the bottom of pyramid depending on the nature of service

outsourced were identified as shown in Table 1.

Table 1 Skills Required in Service Outsourcing in India

Skills required at Senior Positions Technical Skills

Leadership Skills Business development Business analytics Project management Total Quality Management (TQM) Supply chain management Applied finances, Six sigma programmes, Strategic Business management Client management

Legal Work Content Writing Digital Marketing Software Development Primary and Secondary Researches Editorial work Intellectual Property Right Banking services Insurance services Medical Transcription Data Sciences Instructional Designing Web Designing

To qualify for employment in outsourcing companies involved in different types of services,

our manpower must possess the required skill sets. Currently, many of our youths are

unable to pass their criteria of employment. According to NASSCOM, service outsourcing

industry was largest private sector employer and had provided employment to 3.7 million

employees during the period of 2010-2015. To ensure growth in this sector, education




institutions must create such skill structures (refer to Figure 3 and Figure 4) to determine

the type of skill enhancement programmes required to be developed to strengthen the

capacities of workforce.

In this direction NASSCOM has taken an initiative called ‘National Skill Registry’ with an aim

to build a robust and credible information repository on the knowledge professionals in the

sector. It is a national database of registered and verified knowledge workers in the

industry. The database is managed by NDML- a fully owned subsidiary of National Securities

Depository Limited (NSDL)

ROLE OF OPEN AND DISTANCE ELEARNING

Open and Distance education has an immense role to play in building capacities of

outsourcing industry workforce as working professionals in the industry are in great need of

acquiring skills for their effective performance. Online courses have gained significant

traction among working professionals as these allow skill enhancement without breaking

the continuity of their work cycle. Many Institutes such as NIIT Imperia and IIMT, Ghaziabad

have responded to the demand of corporates in outsourcing industry and have launched

online courses meeting their requirement. NIIT Imperia has partnered with IIM Calcutta,

Ahmedabad and Lucknow to cater to professional and educational needs of working

professionals. In the current scenario Open and Distance education universities along with

an edge of being flexible, and accessible, open and distance education of universities are

affordable to youth masses and can be a most preferred way of upgrading self through

recognized and respectable qualification. The magnitude of coverage and capacity which a

university holds can contribute incredibly in building the capacities of workforce in

outsource industry through their open and distance courses. Secondary research in the area

of open and distance learning programmes in private universities/institutes and central and

state universities reveal the existing employment oriented courses imparting professional

skills suiting to service outsourcing industry as shown in Table 2.

Table 2 Courses offered through open and distance learning

Courses in Private Universities Courses in Central/State Universities

Post Graduate Diploma in- Supply chain management Banking and Finance Supply chain management Customer Relationship Management

MBA specialisations in- Information system Total Quality Management Healthcare service E-business




Insurance Management Export and Import Management International business E-business Marketing Management Advertising and Brand Management Production Operation Management Telecom management. Diploma in Innovation management Global Financial markets Talent Management Diploma/Certificate programmes Digital Marketing Instructional Designing/Content Writing Web Designing Medical Transcription Data Sciences Editorial work Research and Data Analytics Cyber Law/Employment Law/Corporate Law/ Intellectual Property Rights

Marketing Management Financial Management Operation Management Financial Market Practice Diploma/Certificate Programmes in Cyber law Intellectual Property Rights Patent Practice International Humanitarian Law Co-operation and Co-operative law

Table 2 depicts that private universities offer greater number of technical and skill

development programme catering to the growing need of outsourcing industry workforce.

However, their heavy fee structure and limited outreach in Tier 2 and 3 cities create

constraints for majority of potential learners in the industry. These need to be developed

and popularised as ODL programmes in Centre/State Universities and must be scaled up in

ODeL based institutes of higher learning.

SCOPE OF E-LEARNING

The component of e-Learning in Open and Distance education is the element which makes

the open and distance education more interactive, effective and valuable. E-Learning tool in

education has not only bridged the geographical gap but has eliminated the difference

existing between regular classes and distance education. The advance technology of virtual

classrooms, web based trainings, videos, WebEx communications providing

videoconferencing, web conferencing, online meetings, student online community,

interaction with Professors via chat has made the learning just a click away. In the current

organizations where an employee plays dynamic role, the blended approaches of ODeL has




immense role. Professionals continuously responding and performing in the changing work

environment and taking actions in their daily operation not only require the knowledge of

concepts but also need a strategic solution to their live problems. ODeL allows learners not

only to gain understanding of the concepts but apply them to design a perfect solution using

the expertise of Specialists in the area through the services of WebEx, chats, online

community and web conference of e-learning tools.

Service outsourcing industry in India which promises to provide 24x7 services needs high

end digital technologies in ODeL to allow working professionals to study in their own time

and place. In today’s fast-paced world, it is very difficult to build the skill set of our

manpower with traditional learning system keeping the constraints and high demands of

outsource industry into consideration. Moreover, e-learning tools are quick to be changed

and updated with latest information enabling the learner to be well informed and

competent in their sector. The workforce of this industry being employees in the captive

unit of on-shore clients are in everyday usage of webinars, videoconferencing, e-learning

modules, WebEx, online chats and so on. Their acquaintance with the digital environment

has made the running of e-learning courses a simple affair. It is now up to education

institutions, various open and distance universities to respond to the demand of service

outsourcing industry and to launch the customised online e-learning courses. India which

evolved as global sourcing hub by doing low end work can strengthen its position in this

sector by doing high end work capable of innovation and other high value activities by

upgrading the skill set of its manpower and ODeL has versatile role to play in this.

CONCLUSION

So far India has been able to maintain its dominant position in the service outsourcing

industry. It has emerged as a preferred destination for BPO work due to the availability of

large numbers of resources fluent in English and the diligent and hardworking efforts.

However for India to survive in an extremely competitive landscape, the outsourcing

industry needs special focus on creating skill sets apart from developing infrastructures,

logistics, multiple business models and high end digital technologies.

There is a great need to develop short term customized courses through ODeL in Digital

Marketing, Data Science, Research and Analytics, Editorial work, Instructional Designing,

Web Designing, Medical Transcription, foreign languages like Japanese, Leadership Skills,




Business development, Business analytics, Project management, Total Quality Management

(TQM), Logistics and Supply chain Management, Customer Relationship Management,

Applied Finances, Six sigma programmes, Executive Programmes in Management and

Strategic Business Management by central and state open and distance universities to meet

the need of firms involved in the outsourcing business. E-Learning tools of Open and

Distance education Institutions have a wide role to play in strengthening the capacities of

workforce who are into 24x7 work profiles. Huge potential lies with the country added by

the fact that majority of its population is young and under 30, referred to as demographic

dividend.

In the global market when other countries in Asia like Philippines are emerging as a viable

alternative to India, Indian outsourcing companies would need to work out various

strategies to stay competitive. The most viable step is to move up in the ‘value chain’ which

means that the outsourcing companies switch to higher end skill work which includes KPO,

LPO, RPO, MBPO and HRO. ODeL has key role in taking the outsourcing industry to another

level up in the curve and thus, must respond to the need of the industry. Efforts in this

direction will enable India to retain its position in global market. Recent changes in global

market being a political change in the nations outsourcing the services or the new nations

entering the global market as competitors; have given India an opportunity to take learning

and work out alternatives in the coming future rather than getting victimised due to

changes in the micro – and macro-environment.

REFERENCES

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Environment. Service Science. 1(2): 25-31

2. Kuruvilla, S. and Ranganathan, A. 2008. Economic Development Strategies and

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Industry. ILR Review. 62 (1): 39-72.

3. Amiti , M., Wei , S., Haskel, J. and Auriol, E. 2005. Fear of Service Outsourcing: Is It

Justified?.Economic Policy. 20(42):307-347.

4. Bhowmik, S. 2004. Labour, Capital & Society Work in a Globalizing Economy:

Reflections on Outsourcing in India. Labour, Capital and Society. 37(1): 76-96.




5. Liu, R., Feils, D. J. and Scholnick, B. 2011.Why are different services outsourced to

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6. The Outsourcing History of India (undated)from https://www.outsource2india.com.

available at https://www.outsource2india.com/why_india/articles/outsourcing

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outsourcing-industry/

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http://www.zdnet.com/article/india-continues-to-dominate-global-outsourcing-industry/

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